Forex Today: Dollar remains on the backfoot

FXStreet Team FXStreet

Here is what you need to know on Wednesday, August 5:

The American dollar tried once again to recover some ground but was unable to do so. Major pairs remained within familiar levels, as investors moved to the side-lines, waiting for the next catalyst.

News that the US Congress has been unable to reach a deal over the next aid-package weighed on the dollar. US House Speaker Nancy Pelosi blamed President Trump for the lack of progress after over 30 million American lost their $600 benefit last week. She said a deal was unlikely for this week.

During the American afternoon, Senate Democratic leader Chuck Schumer says talks with the White House were finally moving in the right direction, boosting the market’s mood despite adding that they remain far apart on some issues, mentioning that the gap between the two parties is “about priorities and about scale.”

Meanwhile, the coronavirus continues to take its toll on the US. White House coronavirus response coordinator Dr. Deborah Birx said that the virus is extraordinarily widespread. The country continues to report, on average, roughly 60,000 new cases per day. So far, no tougher restrictive measures have been announced, and it seems unlikely authorities will fall into them. Still, it’ s a major negative factor for the greenback.

Also, tensions between Washington and Beijing hit the top currency. Tensions are now focused on the TikToK app and its potential for holding sensitive information. US President Trump is pressuring owner ByteDance to sell the app to Microsoft.

In the UK, PM Johnson announced another round of stimulus, focused in home construction and infrastructure, aimed to boost the economy. The report suggested investment of around £900 million, £360m of which would be allocated towards delivering 26,000 new homes on brownfield land.

Wall Street closed with gains, while US Treasury yields edged lower, settling around their recent multi-month lows.

Crude oil prices rose for the second straight day on Tuesday, and ahead of US stockpiles reports, underpinned by the positive tone of Wall Street.

Gold reached fresh all-time highs above $2,000 a troy ounce, as investors continue to seek long-term refuge. An economic comeback remains out of the picture for most major economies.

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